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Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory.
Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory. Data for the past six months were collected.
Month
January
Maintence cost : $
Machine hours:
February
Maintenance cost:
Machine hours:
March
Maintenance cost:
Machine hours:
April
Maintenance cost:
Machine hours:
May
Maintenance cost:
Machine hours:
June
Maintenance Cost:
Machine hours:
Required:
A Using the highlow method, calculate the fixed cost of maintenance and the variable rate per machine hour. Round the total fixed cost to the nearest dollar, and round the variable cost per machine hour to two decimal places.
B Using the highlow method, construct the cost formula for the total maintenance cost.
C Calculate the budgeted cost for maintenance assuming that hours are worked next month. Round the answer to the nearest dollar.
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